Workday WDAY, the HR software company known for its widespread use, sees a significant opportunity with Elon Musk and Vivek Ramaswamy’s new government plans. The same Workday that has faced criticism from job seekers and employees for its user experience sees potential in DOGE, the “Department of Government Efficiency.”
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Under Musk and Ramaswamy's direction, DOGE supposedly aims to cut administrative costs, optimize agency headcounts and modernize outdated processes to streamline the federal government. This objective, to replace conventional “on-premises” HR systems with cloud-based alternatives, fits in nicely with Workday’s area of expertise.
Currently, more than 80% of the federal government’s HR systems are still running on local servers, according to Workday’s CEO, Carl Eschenbach. He believes that with DOGE advocating for cost-saving measures and improved efficiency, federal agencies are at an “inflection point” where they just might transition to cloud technology. Workday is prepared to offer its government-focused product to support this transition.
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“Postelection and with DOGE coming out, people are absolutely looking to drive more economies of scale and more efficiency. And I can tell you supporting these on-premises, antiquated systems is not a way to do that,” Eschenbach said.
Business Insider mentions that the Department of Energy and the Defense Intelligence Agency are among the prominent clients that Workday has already attracted. Eschenbach believes this is only the beginning and that other federal agencies will soon use cloud-based HR solutions. On the most recent earnings call, he referred to this possible change as a “tail wind” that would improve the company’s government business going forward.
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Even though Workday reported a strong quarter with revenue and profitability above forecast, experts have differing opinions on the firm’s prospects for growth, which presents significant difficulties for the company. Some see potential in Workday’s AI tools and expanding market presence, while others are concerned about slower growth and revised revenue guidance.
Its AI products are showing strong traction, with 30% of third-quarter customer expansions incorporating AI solutions. This led to a 39% reduction in turnover and a significant sales price boost. Nevertheless, Workday's share price has been volatile and growth estimates for 2026 have been adjusted downward.
Still, Workday’s focus on DOGE could be an important strategic move. If Musk and Ramaswamy’s efforts to reform the federal government gain momentum, Workday could be key in modernizing how federal agencies manage their workforce. For now, the company is concentrating on federal opportunities, with hopes that the shift to the cloud will benefit both the company and its clients – even if the software continues to face criticism from users.
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